Well….not May 18th “exactly” but right in / around there somewhere.
With May’s Bitcoin halving event drawing ever closer, Coinbase recently took to pushing the “Bitcoin as digital gold” narrative. In a tweet-storm to promote an accompanying blog-post published Feb. 7, it covered the key reasons why the halving and subsequent supply rate reduction will further cement that link.
Scarcity creates value
Since the gold standard was broken in 1971, the dollar’s value has declined and gold’s value, in dollar terms, has risen over 4000%. Gold has more value than similar metals such as copper due to its relative scarcity and difficulty to acquire.
Bitcoin has been designed to be scarce like gold and is very difficult to acquire through the Proof-of-Work process of mining. However, it also has an advantage over gold in being transferable through a communications channel.
“Armed with a myriad of technological advantages, accelerating development, and maturing global market, Bitcoin is a store of value to rival gold in the digital age.”
Halving increases scarcity
The supply of Bitcoin is limited by design, with new tokens being minted as a reward every time a block of transactions is mined. The initial reward level of 50 BTC per block has already undergone two halving events, bringing it down to the current 12.5 BTC per block.
After the May 2020 halving, mining rewards for each new block, mined approximately every ten minutes, will reduce to 6.25 BTC. This will bring the supply issuance of Bitcoin to a rate of around 1.7% per annum.
Stock-to-flow (S2F) is a measure of new supply rate over total supply, and post-halving, Bitcoin’s S2F scarcity will be on a par with gold’s.
“Gold’s stock to flow is higher than any other metal commodity, and bitcoin is set to soon follow,” notes Coinbase.
Why Bitcoin Has Value
No value without demand
S2F forecasts for the price will fail if there is no demand, and this holds true for fiat money, as much as any other commodity. As central banks increase the money supply, economies can sometimes prosper. However, if money supply overwhelms demand then hyperinflation events can occur.
Such events drive demand for safe havens such as gold and Bitcoin, and recent economic fear is reaching all-time highs, according to the Global Economic Policy Uncertainty Index.
This, along with Bitcoin’s myriad of technological advances and accelerating development, justifies Bitcoin’s title as digital gold, according to Coinbase.
Me? I couldn’t agree more.
Ask yourself this……how many millennials will “ever” “EVER” consider buying Gold?
I don’t know what all the doom ‘n gloom is about. Considering the “12 year run straight up” – doesn’t it just makes sense ( as we’ve seen repeated time and time again ) that things take their “more than expected” turn lower?
This is far to early in the daily cycle to consider “a bottom” and we’ve also got to take into consideration the weekly, monthly and yearly cycles now in play.
There are millions of ways to play down turns via Vix purchase or short U.S.D trades….there’s inverse ETF’s and crypto currency which is now expected to rise moving into the Bitcoin halving. One could even consider gold but as you’ve recently seen – Bitcoin is the new gold.
Based on fundamental measures they track, the stock market is the most overvalued it has ever been. They describe it as a “speculative mania,” adding that the measurements are higher than the tech bubble.
But people still think this time will be different? Isn’t this the definition of insanity? Doing the same thing over and over with expectations of a different result?
I believe it was a lesson once taught in grade 4 mathematics, now rearing it’s ugly head in stock portfolios – planet wide.
Like an elastic band, or perhaps a fold in time and space – matter stretched beyond any reasonable degree….finally “snapping back” in awesome fashion. We can see it in nature, and now we can see it through the actions of billions of computers in global markets.
So the question begs….can we see it in ourselves?
A quick snapshot of the Dow 30:
The 200 Day Average A Long Ways Away
Let’s say the 200 Day Moving Average (where it stands) is a long shot as…….it pretty much goes without saying – Central Banks will “once again” look to extended the party to the best of their abilities but…. also consider “time”. CB’ are powerless to this volume of selling.
If/when this intermediate ( and possibly “yearly’ ) decline in equities world wide picks up steam ( hmmm…..1000 points shaved off in just a single day? ) it could easily take months AND MONTHS for price and time to finally converge at the 200 DMA.
Maybe somewhere around 25,000 by June? July? This seems very reasonable, and considering the circumstances possibly a little too optimistic but….you know me. Realism right? No negativity here….just plain ol technical analysis and a decent handle on the fundamentals.
With all major areas of support now broken and the corona virus essentially putting the worlds manufacturing engine to sleep for a full 2 months now, it doesn’t take a rocket scientist to plot the trajectory.
Why would central banks look to “buy into this”? – Exactly…..they won’t.
Supply chain disruptions and grossly lagging profit projections and earnings will only “start” reporting late March, and we KNOW Apple for example has already guided down / will miss.
THIS WILL GO FOR NEARLY EVERY SINGLE COMPANY KNOWN TO MANKIND….as corona provides the catalyst for global selling.
Finally a REAL REASON The Fed can pin this on. The great escape began last Thursday, and the door got jammed open yesterday. The computers can run faster than you.
“The short covering in TSLA ( when shorts need to close their positions and essentially “buy” whether they like it or not ) has now propelled the stock to the stratosphere, with Tesla now having a market cap higher than both ford and GM – COMBINED?? They’ve only sold 400,000 vehicles!
Kong and Musk
I loooooove Tesla, but the amount of “hot air” now, has this thing floating out of our atmosphere where the air starts to get thin…..really thin.
Regardless…..today will mark the very first day of a new DAILY CYCLE in equities where in…….we can generally look at anywhere between 18-21 days of upward activity “unless” this thing rolls over hard this afternoon or tomorrow morning.”
If anyone thinks this is “for real” – please…..I’ve got some swamp land in Florida I think you’d be interested in buying.
In being a kind, compassionate Gorilla I just I can’t help myself. I need to let you know these disturbing facts so that ( at the very least ) you can arm yourself with as much information as possible.
The Fed pumped 94 BILLION DOLLARS of funny money into the system last night…..and China chipped in for an additional 1 TRILLION YUAN to assure you, your grand children, and your goldfish that there is nothing to worry about..
Markets Floating In Outer Space
The short covering in TSLA ( when shorts need to close their positions and essentially “buy” whether they like it or not ) has now propelled the stock to the stratosphere, with Tesla now having a market cap higher than both ford and GM – COMBINED?? They’ve only sold 400,000 vehicles!
I loooooove Tesla, but the amount of “hot air” now, has this thing floating out of our atmosphere where the air starts to get thin…..really thin.
Regardless…..today will mark the very first day of a new DAILY CYCLE in equities where in…….we can generally look at anywhere between 18-21 days of upward activity “unless” this thing rolls over hard this afternoon or tomorrow morning.
Do what you will, but as per my projections some time ago……if you aren’t 100% protected OR weighted very heavily in a cash position now…..
March sees the GORILLLA MARKET coming on – AS EXPECTED.
Planning on getting short USD “again”? Maybe consider picking up some Bitcoin.
The United States central bank will inject at least $425 billion of nonexistent money into the economy by the middle of next month.
In a statement released Dec. 11, the Federal Reserve confirmed it would ramp up so-called repurchase, or “repo,” operations on key dates over the new year period.
Fed to “print” 3x Bitcoin market cap in weeks
The time of year required extra assurances for banks, the Fed claims, with repo operations designed to support their day-to-day operations.
“The Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York has released the schedule of repurchase agreement (repo) operations for the monthly period from December 13, 2019 through January 14, 2020,” the statement reads.
Dollar Falling Hard In January
The Fed then confirms:
“In accordance with the most recent FOMC directive, the Desk will conduct repo operations to ensure that the supply of reserves remains ample and to mitigate the risk of money market pressures around year end that could adversely affect policy implementation.”
Repo offerings on Dec. 31 and Jan. 2 will be $150 billion. By the Jan. 14 deadline, the minimum the Fed expects to generate is $425 billion.
While common, such moves involve conjuring vast new liquidity based on zero backing — essentially money printing without physically printing any money.
Critics, especially in Bitcoin (BTC) circles, have long highlighted the policy as an example of the failure of central banks to “manage” economies.
The argument forms a central tenet of Saifedean Ammous’ popular book, “The Bitcoin Standard,” in which he argues that the fall of nations and empires stems from the fall of a currency that is not allowed to operate free of manipulation.
Similar calls in favor of Bitcoin surfaced in September during a previous repo spike.
Commenting on the most recent Fed announcement, Bitcoin advocate known as Rhythm on Twitter noted that $425 billion is over three times the size of Bitcoin’s market cap.
“Everything is fine though,” he ironically summarized.
As Cointelegraph previously reported, U.S. national debt reached $23 trillion in November — around $12 million for every Bitcoin that will ever exist. That figure is now at $23.12 trillion, according to online monitoring resource U.S. National Debt Clock.
What a complete and total joke, as your purchasing power continues to dwindle / money continues to fall from the sky. Please start looking at your “escape plan” BEFORE you start seeing the massive red candles some time around March.
You’ve all heard the hype surrounding Lithium and the incredible applications / needs for future tech like car batteries / aerospace and even mental health (strange but true).
The Global X Lithium and Battery ETF has only “just now” began to breakout, paving the way for many, MANY excellent value trades / investments in several smaller Lithium companies down at these levels.
Remember: WE BUY IN THE RED and SELL IN THE GREEN Right? Right?
I have done a pile of research on several smaller mining companies, who all stand to gain considerably from a break out in Lithium names in general. One World is 100% completely and totally oversold.
This company is on the verge of something big. Ie…….a major deposit on the Baja Peninsula of Mexico ( go figure eh? ) could soon be announced as one of the largest found in recent years. I’m talking about a major, major discovery.
Looking at the chart, one might consider holding off but as far as my math goes……I can’t imagine lower. The demand for lithium is insane, and “any” new discovery / deposit will be serious news – globally.
Take it for what it is: I am a buyer down here – no questions asked. Nine cents? Common.
Lithium Stocks For Value Investing
The Salar del Diablo Property is about the same size and has similar geologic attributes as the Salar de Atacama ( huge deposit in Argentina ) , which has two lithium/brine productions with one of them, SQM that produces 27% of the world ‘s supply and has 15% of global reserves.
A little more about the company if you give a rat’s ass.
One of the larger salars in the world that is being drilled in 2019 with a 4,250 meter (14,000 feet) in 12 drill holes that started on May 24, 2019. The initial 5 drill holes did not reach the planned total depth to intersect their targets. The drilling program will resume in the fall of 2019 which may include re drilling of some of the five holes.
A large property covering a 103,430 hectare or 400 square mile salar.
All 83 geochemical surface samples taken over 80 kilometers had an average grade of 78 parts per million(ppm) lithium. 59 of these geochemical samples taken within the geophysical survey grid have an average grade of 86 ppm lithium that defines a geochemical anomaly covering 150 square kilometers. As surface samples, these results are anomalous.
The five geological conditions that are necessary to develop lithium brine are present at the Property, which include hot springs, a volcanic source rock containing lithium, fault structures, a closed basin (meaning that water does not escape the basin), and a regional volcanic heat source.
Initial geological analysis indicates an extensive and active structural environment including both north-south and lateral faults that are present throughout the survey area.
Geophysical survey results identified 3 large highly conductive zones that cover more than 54 square kilometers and may indicate the presence of brines.
Zone One may be more than 100 meters (300 feet) thick and zone three may be more than 200 meters (600 feet) thick.
The salar is estimated (based on prior gravity surveys) to be 8,000 feet deep at the western margin and could contain lithium-bearing aquifers that may be stacked to depth.
The Salar del Diablo is located 35 km from San Felipe, which is a regional service center that will likely reduce exploration and development costs. It also has a seaport that may be upgraded to ship product worldwide, including Asia.
The Salar del Diablo is about the same size and has similar geologic attributes as the Salar de Atacama, which has two lithium/brine produces with one of them, SQM that produces 27% of the world ‘s supply and has 15% of global reserves.
As I see it these guys are sitting on something absolutely incredible, but of course – we can’t know until we know for sure! Do your own homework, as I can only imagine you guys must see a new one of these things every day of the week.
The implied chance of the Federal Reserve cutting rates this month jumped above 90% Thursday following another weak economic indicator. The ISM’s services measure hit a three-year low for September, which followed a 10-year low in its manufacturing index earlier this week. Chances of a rate cut were below 50% at the end of last week.
QE5 Has already begun
The fed funds futures are now pricing in a 91.9% chance that the Fed cuts its benchmark rate to the range of 1.5% to 2% from 1.75% from 2%, according Investing.com’s Fed Rate Monitor Tool.
Expectations of a cut topped 75% in the previous session.
We are going to zero people. Zero and then SUB ZERO interest rates coming as the Fed has clearly lost all control.
You caught the 300 BILLION dollar injection thru the repo market last week ya?? Get this……that is more “fake printed money” pumped into markets in ONE WEEK….than the ENTIRE market cap of the ENTIRE CRYPTO CURRENCY MARKET. In one week!
Stay safe people. You will wake up one morning with Dow – 1200 and that will be that!